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| Question | Answer |
| Breakeven Point | Point at which seller has covered all expenses and costs and has made no profit or suffered a loss. |
| Contribution Margin | Difference between selling price and variable cost. |
| Cost | Price retailers pay to manufacturer or supplier to bring merchandise into store. |
| Dollar Markdown | Original selling price less the reduction to price. Markdown may be stated as a percent of the original selling price. |
| Dollar Markup | Selling price less cost. Difference is the amount of the markup. Markup is also expressed in percent. |
| Fixed Cost | Costs that do not change with increase or decrease in sales. |
| Gross Profit | Difference between cost of bringing goods into the store and selling price of the goods. |
| Margin | Difference between cost of bringing goods into store and selling price of goods. |
| Markdowns | Reductions from original selling price caused by seasonal changes, special promotions, and so on. |
| Markup | Amount retailers add to cost of goods to cover operating expenses and to make a profit. |
| Net Profit (Net Income) | Gross profit - Operating expenses |
| Operating Expenses (Overhead) | Regular expenses of doing business. These are not costs. |
| Percent Markup on Cost | Dollar markup divided by the cost; thus, markup is a percent of the cost. |
| Percent Markup on Selling Price | Dollar markup divided by the selling price; thus, markup is a percent of the selling price. |
| Perishables | Good or services with a limited life. |
| Selling Price | Cost plus markup equals selling price. |
| Variable Cost | Costs that do change in response to change in volume of sales. |
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